Eight Tips for Highly Effective Exports

Exporting
is not an easy, quickly mastered endeavor. In addition to a lot of planning and
preparations before the first product can even be exported to a foreign market,
the establishment of reliable relationships and the adaptability of strategies
to local developments need to be considered. There are eight important
practices to follow in order to be successful when exporting:

1. Develop a Long-Term Strategic Plan

The
first step for every business looking to export their goods is to develop a
long-term and detailed plan. Such business plan should include a strategy on
how to get in contact with reliable local partners or agents, and how to
establish long-lasting relationships. In addition, the plan should outline a realistic
timeline and budget.

2. Focus on Due Diligence

Effective
exporters always conduct a thorough analysis while looking at the foreign
market from all possible angles. This due diligence analysis does not only
include considerations like the number of documents required for exporting, transportation
cost and time, custom duties and tariffs, export license and labelling requirements,
tax implications or storage costs, but also the country’s political or social stability,
infrastructure, quality of work force, language, timelines of custom procedures,
and contract enforcement and collection procedures. One important consideration
that should always be taken into account is the foreign country’s receptiveness
to American products.

3. Think Global, Act Local

Not as
obvious of a practice is the concept of adaptability of the exported products
and goods to the foreign market. It is immensely important to keep the local needs
and preferences in mind. It is easy to focus on the big picture; exporting the
product on a global basis but then forget that seemingly minor cultural
differences (for example between cities, districts, counties, or states) have a
major impact on a business’ success. Strategies that work really well in one
part do not necessarily transfer to another area, and always need to be
reevaluated and adjusted according to the business climate in that particular
location.

4. Pay Attention to Geographic Diversity

Closely
tied with the previous statement is the fact that in most foreign markets it is
almost impossible for a U.S. business representative to become aware of and act
according to cultural differences. Having a local partner that is familiar with
the desired area adds credibility, commitment and trustworthiness to a U.S.
business appearance. Constant communication and involvement of the local
partner is extremely important for successful exporters.

5. Be Patient + Commit Long-Term

Successful
exporting takes time and commitment, not just from afar, but locally. It is
important to realize that the success of the operation to access a new market
cannot be done overnight and smaller setbacks need to be anticipated. In order
to establish relationships with local distributors or agents, it will be
necessary to send one or more representative(s) to the foreign market to not
only show commitment but also create personal relationships between the
business partners. Cultural differences always need to be taken into account
and consistent follow-up on the exporter’s side will be required to succeed. Behavior
that deviates from the American business culture is not necessarily a negative
sign, but a cultural nuance that needs to be taken into account by adjusting
the business model accordingly.

6. Ensure Compliance

In
addition to knowing the general legal and practical requirements for exporting
to a specific foreign market, exporters have to be aware of internationally
applicable agreements like the Foreign Corrupt Practices Act (FCPA) that provides
provisions preventing bribery of (foreign) government officials, but also a
duty to keep financial books and records accurate, and can impose significant
fines and even jail time for guilty individuals. The FCPA applies to U.S.
countries, citizens, foreign subsidiaries, officers, directors, and agents of a
U.S. company and its scope are not restricted to U.S. territorial boundaries.

7. Protect Existing Intellectual Property (IP)

Keep in mind that even if a
company’s IP is protected in the U.S., this does not automatically provide the
business with global IP protection. IP registration is country specific and
should be achieved or at least discussed with IP specialists before penetrating
a new market to ensure maximum protection in the targeted area. Most countries
operate under a First to File and not a First to Use model, which makes a
timely registration imperative to a company’s success.

8. Rely on Experienced Global Business Legal Counsel and Advisors

Even with experience in other countries, a successful entry strategy into a new market is almost impossible without sophisticated legal counsel and other advisors that have a deep understanding of the necessary global business requirements in addition to the requisite experience with the desired market. Competent advisors can structure entities in a tax-focused way from the beginning of the operations, and thereby save money and time. Just as important is cooperation with local counsel in order to understand the local labor market and avoid non-compliance with specific local regulations regarding repatriation of funds.